Blanket Lien
When you’re five, and you put a lien on your favorite blankie.
Okay, so...first off, what’s a lien? If you asked a friend for $100 to borrow, and your friend said, “hey man, you still owe me $20...why would I give you $100?” and you said, “okay, if I don’t pay you back, you can have my watch, which is worth at least $100” and your friend says “deal,” you just took out a lien on your watch.
A lien is basically a promise...that if you don't pay back the money you've borrowed, the lender will get something of yours as collateral.
So what’s a blanket lien? One that covers all the stuff you own (which means good for the lender, not good for the borrower).
If you borrowed money with a blanket lien on everything you owned, that means the lender could take all your stuff and sell it to get their money back. If you hear “blanket lien,” you should be afraid. Very afraid. It’s so scary it might make a good Halloween costume.
Related or Semi-related Video
Finance: What is the Debt to Equity Rati...18 Views
Finance allah shmoop shmoop What is the debt to equity
ratio or duras It is named in insane asylums all
over the world Well it's a balance sheet computation that
tries very roughly to measure how efficient a company is
using its precious capital resource is the numerator comprises long
term liabilities on ly For most companies with debt the
amount of long term debt vastly outweighs the short term
So they ignore the short The denominator is the company's
shareholder's equity Easy You know that computation right ale and
think that's the capital invested in the business that's what
Isthe so what does it mean to have a high
durer Well if shmoop a loops llc a producer of
the most delicious cereal on the planet has four billion
dollars of debt And on lee fourteen dollars of equity
will you don't have to be a wall street genius
to get that that's bad right Tons of debt almost
no equity It means that loans comprise some ninety nine
percent of the company and well that it is essentially
owned by the bank and other creditors not by the
equity stake holders And you want steak Flip things around
Your cisco networks with a billion dollars of debt and
like fifty billion dollars of equity Well the shareholders clearly
owned this company The size of the equity dwarfs the
size of the debt Got it Bottom line High ratio
bad low ratio Good at least if you're one of
the owner investors But if you're a banker with a
hankering to own a cereal company well then today you 00:01:33.338 --> [endTime] might be able to just take one over girls
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